BoAML cuts NAB’s forecasts

This is an edited selection of today’s best postings on Street Talk, which is updated throughout the day on AFR.com.

Reflecting National Australia Bank’s expected higher bad debts, Bank of America Merrill Lynch has lowered its earnings estimates by 5 per cent, 3 per cent and 1 per cent respectively for the bank’s 2013-15 financial years.

“We remain concerned NAB’s credit risk profile, in the UK and at group level, will present persistent earnings drags affecting the stock rating," analyst Matthew Davison said in a note to clients.

Davison has also reduced NAB’s dividend estimate for 2014, to reflect a 70 per cent payout “as we believe NAB needs more headroom to deal with the UK and higher provisions".

BoAML has a price target of $22.80 and an “underperform" recommendation. NAB’s share price was down 10¢, or 0.39 per cent, at $24.20 in morning trade on Monday.